Washington Wants Better Oversight Of For-Profit Colleges

By cwaltersJune 15, 2010

Enrollment in for-profit colleges like the University of Phoenix, DeVry University, and Kaplan University–Gawker calls them fake colleges–tripled in the past decade, and has become such a fast-growing segment of the education market that some members of Congress think it needs better oversight.

Lobbyists of the for-profit industry are warning that if any of the proposed rules go through, programs will have to be shut down and students will drown in their own ignorance. They also point out that getting a higher-education at a fancy schmancy, Gawker-approved school can leave a student with a pile of debt and no real career path, so what’s the difference?

One problem, from the government’s point of view, is that the for-profit college industry gets a lot more federal aid than other higher-education institutions, notes the Washington Post. In 2000, federal aid to for-profit colleges was $4.6 billion; in 2009, it was $26.5 billion.

Despite all that federal money flowing into for-profit colleges, the newspaper says that more than half of graduates in 2007 ended up with at least $30,000 in loans.

Okay, those last two paragraphs made it seem like all for-profit colleges are scams, but even the government doesn’t see it that way:

While the Obama administration seeks to increase oversight of for-profit schools, it acknowledges their significant role. Education Secretary Arne Duncan last month urged the sector “to get rid of bad actors.” But Duncan added: “Among the for-profits, phenomenal players are out there making a huge difference in helping people take the next step in the economic ladder.”